Larry Catá Backer's comments on current issues in transnational law and policy. These essays focus on the constitution of regulatory communities (political, economic, and religious) as they manage their constituencies and the conflicts between them. The context is globalization. This is an academic field-free zone: expect to travel "without documents" through the sometimes strongly guarded boundaries of international relations, constitutional, international, comparative, and corporate law.

Friday, December 02, 2016

Comparative Analysis From Cuba CounterPoints: (1) From Cuba, Trump: Reality Show or Real Politik?; (2) November 26, 2:13am: A Testimony and (3) U.S. Cuban Policy After Obama

Our friends at Cuba CounterPoints have been following the two recent events with the greatest potential impacts on U.S.-Cuba relations--the election of Donald Trump and the death of Fidel Castro. The former marks a very concrete possibility real changes going forward; the latter marks a potent symbolic passing of the manifestation of a foundational vision. They have published three interventions that may be of interest, one from Cuba, from the U.S. and one from the "trenches" of the Cuban Diaspora. The three follow below with links to the originals in Cuba Counterpoints. The first, from Cuba, Trump: Reality Show or Real Politik? By Yailenis Mulet Concepción (and translated from the Spanish original by Ariana Hernandez-Reguant) who concludes:

A Cuba without Fidel could evolve gradually toward an economic and political transition. Initially, that transition would unravel under the Development Plan’s guidelines, announced during the 7th Communist Party Congress and intended until 2030. Once Raúl Castro relinquishes the presidency, the process could accelerate. A Trump administration could alter these plans, either with a costly and fruitless reality show (a return to the Cold War and to U.S.-Cuban conflict) or with a real politik of greater positive consequence than that of Obama’s in normalizing relations between the two countries.

My grandmother said it best when my mom told her what had happened. “Me siento extraña,” she said. “I feel strange.” For an entire generation on the island there is no reference point for change. For an entire generation outside the island, there is no reference point for our lives without Fidel, that real and imaginary figure, reshaped in Miami – Enemy #1. No wonder we spin, and spin. The hope is that once we stop spinning, we’ll still be able to find our North Star.

The legacy of Obama might not be completely undone. But it will be redirected, and the pace of change may slow. Fidel’s death makes things easier—he has moved from contemporary to historical presence. But Cuba and the U.S. still speak quite different political languages, and their objectives for Cuba are quite different: well-managed economic contributions for the Cubans, and political transition for the United States. There is a small space where their interests converge. But there are still many people fighting old ghosts on both sides of the Florida Straits, and it is possible that even this small space may be appropriated by those with a substantial interest in preserving the past.

The end of 2016 has brought about big question marks. The most important international media and press outlets seem to resort to divination to try to gauge the course of US-Cuba future relations. For some, Fidel’s sudden passing would lead Raúl Castro’s government to greater market reforms. In turn, Trump could go back to Obama’s “soft landing”-type of rapprochement. In other hypotheses, neither Fidel’s death nor Trump’s envisioned hard stance toward Cuba would result in any major changes in the island. The fact is that any prognosis should take the following into consideration: What changed in Cuba as a result of the Obama administration’s policies? What was Fidel Castro’s impact on the speed of the economic reforms within Cuba? Trump, however, could have the power to upset these scenarios.

Neither Obama nor Fidel have determined the depth of the reforms
For sure, the Obama administration’s policies have led to new scenarios, particularly within the private sector. To some extent, their impact on the Cuban economy has been positive, chiefly with respect to tourism, commerce, purchasing power and consumption – in the latter case thanks to increased remittances. Of course, in a non-embargoed Cuba, the impact would have been a lot greater, extending to investments, services, ties between both economies, and export opportunities. However, domestic reform has proceeded according to pre-established plans, and the private sector has failed to achieve the level of empowerment envisioned by Obama’s government.

Neither have Fidelista sectors (the so-called old guard), more reticent to deep changes due to their ideological convictions, tried to slow down the necessary economic reforms in Cuba. The real boycotters of the reforms have been those referred to as “rent-seekers” (some politicians, local bureaucrats, entrepreneurs, and apparatchik). In order to not see their power, revenues or comfort diminished, they have faked loyalty to the government, while promoting stagnation. They have resisted change and have tried to take out of circulation all those who could threaten their comfort zone.

In addition, the main roadblocks to reform have been an economic model based on centralization, and a deficient fiscal policy. It is impossible to think about economic growth, foreign investment, and state enterprises’ productivity, (1) without the state providing incentives as well as financing for public investments, and (2) in a context where enterprises must make do with labor and capital assignations, as well as decisions on imports that are pre-decided at the top.

Hence, Obama’s political opening was not the determining factor in the speed of Cuba’s domestic economic reforms. Neither Fidel’s passing should give Raúl Castro’s government more or less leeway to implement a de-centralization process and transparent property rights.

Trump’s Perspective

In almost twenty years, Trump has held three different positions toward Cuba, and none favorable to a dialogue that would be acceptable to Havana. At the end of the nineties, he tried to invest in hotels and casinos in Cuba, only to change his mind later, alleging that such an investment would subsidize Cuban people’s oppression. Then, at the beginning of his presidential campaign, he said that he would not undo the new diplomatic relations with the island, but that he would renegotiate a “better deal” than that of Obama’s. By the end of his campaign, he offered to the Cuban American Republican hardliners to revert all the Cuba-related policies established by the Democrats.

More recently, the bellicose tone of his declarations concerning Fidel Castro’s passing suggests that Trump will not accept an agreement with Havana unless the Cuban government promises to change the status quo. One does not have to be an expert to know that the Cuban leadership, including the one that inherits power from Raúl Castro, will not accept to negotiate with those that pretend to interfere with Cuba’s domestic affairs. And right now, Trump claims that he will only negotiate if the Cuban government implements specific changes.

Having said that, Trump might not be a declared ally to a socialist Cuba, but he might not end up being an adversary either. US-Cuban relations will change without a doubt, but there are several reasons why Trump might be more conciliatory than one might think now. As a pragmatic businessman, Trump might rally his political alliances to call for the embargo’s end. His position regarding immigration suggests that he might see Cuba as a source of illegal immigrants, and move to abolish the Cuban Adjustment Act. Morover, a rolling back of the current opening would make the U.S. government responsible for the financial losses of many companies, like the big airlines (American Airlines, Jet Blue) that are already flying to Cuba, agricultural firms, cruise companies like Royal Caribbean, and other firms like Verizon, MasterCard, Tyson Foods and Netflix. Finally, a continuation of Obama’s policies might help Trump overcome his negative image in Latin America and improve ties with Latin American leaders.

Trump’s New Deal

Trump’s bellicose tone does not impress a Cuban government used to confrontation with the United States. In fact, Cuba has ridden U.S.’s animosity to establish economic agreement with U.S.’ enemies and to forge new international alliances.

Domestic social and economic change in Cuba is unavoidable. There are few doubts, even within the Cuban government, that the current economic model is dysfunctional and that cosmetic reforms, without deep change, are sterile. A direct confrontation by the United States, demanding changes, would only antagonize the Cuban government and delay domestic change, if only to not give in to U.S. demands. U.S. antagonistic politics would only serve to empower those within the Cuban leadership who resist change, and thus reinforce economic instability.

President Trump will need to overcome a few challenges if he pursues a dialogue with the Cuban government. To negotiate with Cuba will not be like in “The Apprentice”’ second half, when Trump determines who will be fired, to a soundtrack of The O’Jays’ “For the Love of Money.” For starters, he will have to take care of four major issues:

First: He will need to promote good faith as the basis for dialogue with the Cuban government. That might not be easy given the fact that Trump has called Fidel Castro a tyrant and an oppressor, and is also including pro-embargo officials in his team.

Second: He will need to define coherent and realistic negotiating points. For instance, to demand the return of North American properties would just hijack all progress. Most of these properties are now used as schools, hospitals and other public services, or were transferred to cooperatives and families. To compensate their former owners would cost Cuba more than sustaining the country’s economic grown on a 10% during five consecutive years.

Third: He would have to clearly identify the priority subjects in his policies. It is obvious that the interests of Florida exiles opposed to dialogue with Cuba are incompatible with those of businesses or of the Midwest’s agricultural interests, to just give one example.

The fourth challenge will entail his administration’s recognition of a “safe context for the Cuban Revolution.” Fidel Castro created a socio-political order alternative to that of the U.S. Cuban institutions, as well as many Cuban citizens, might not stay faithful to that ideology, but will surely fight for both national sovereignty and political stability within Cuba. Cuba, moreover, has the support of many foreign countries, which favor a gradual transition, in economic terms (toward a mix economy) as well as political (toward a market socialism or social democracy). Such support is in many cases predicated in Cuba’s position as an alternative to U.S. hegemony.

In Conclusion

A Cuba without Fidel could evolve gradually toward an economic and political transition. Initially, that transition would unravel under the Development Plan’s guidelines, announced during the 7th Communist Party Congress and intended until 2030. Once Raúl Castro relinquishes the presidency, the process could accelerate. A Trump administration could alter these plans, either with a costly and fruitless reality show (a return to the Cold War and to U.S.-Cuban conflict) or with a real politik of greater positive consequence than that of Obama’s in normalizing relations between the two countries.

We had to park on a side street and walk because Calle Ocho was so congested. Our goal: Versailles Restaurant, which we knew would be the epicenter – the glowing ember that was reverberating out through all of these red brake lights, lined up, like an impressionist painting. One car after another, the people inside longing for community, for their fellow Cubans to celebrate with.

The soundtrack: Wooden and metal spoons against pots and pans of every color. Pots and pans that had been lifted from stove tops and pantries on the way out the door, for music. Because of course there had to be music. Timbales, claves, drums made out of buckets. Horns accenting chants: Viva Cuba Libre! An old man with a liberty bell, clanging like his life depended on it – because it had (for so many years). “Libertad! Libertad!”

The most common brushstroke: Floating flags swaying: American, Cuban, Venezuelan (in camaraderie). A smattering of orange balloons, I can only imagine were left over from a party — orange-copper, color of flame, starred – some of them escaping, scraping past hands, up toward the sky.

And then, every once in a while, like small ditches, there were pockets of sadness – little black holes where the censure and repression and death still crept, so used to hiding out they didn’t know where to go now. Tired kids holding their parent’s dreams, not quite understanding, but feeling-through what all of this might mean. Smiles, laughter, tears; rage, hope, and despair.

As an American Born Cuban (ABC), this is a mythic moment – a moment the exile community that raised me has longed for, for nearly six decades. In my mind now, however, a kind of emptiness marks the occasion – a basket for the catching of this news, this celebration: Fidel Castro’s death. I circle the crowd like a dreidel. My fiancé turns to me and asks: “Are you ok? You’re not crying?” He knows I’m usually a fountain – tree sap, I confess. But not now. The first phase of grief, perhaps – shock? Grief not for the death of Fidel, but for all those that had lost an island – had been forced to flee by sea or land – through the Florida Straits and the Amazon. Some of them never to look back, others like Orpheus, forever reaching backward, forever losing. For those that had died at sea, trying to get out of the pressure cooker. Out no matter what, floating like those copper balloons, some swallowed by sharks or by the water itself, out of Cachita’s hands.

I spent my childhood watching Cubans wash-up onto South Florida’s shores. 500 a day during the worst of times, that “Special Period,” marked by hunger – the end of Soviet subsidies to Cuba, a final chokehold on the lizard-looking landmass after the fall of The Berlin Wall. Risking it all, gasping for air on inner tubes the size of pool floats, people leaped toward freedom. Boats made of cars, rubber, wood, anything that would float, take them out of Havana, Cienfuegos, Santiago, Camagüey.

All of this swims in my head as I drift, out on the street, no pots to hold or play – only a camera. It’s too soon to really clarify all this, too soon to tell what the merengue we are making will turn out to taste like.

My grandmother said it best when my mom told her what had happened. “Me siento extraña,” she said. “I feel strange.” For an entire generation on the island there is no reference point for change. For an entire generation outside the island, there is no reference point for our lives without Fidel, that real and imaginary figure, reshaped in Miami – Enemy #1. No wonder we spin, and spin. The hope is that once we stop spinning, we’ll still be able to find our North Star.

The November 2016 U.S. presidential elections substantially changed the course that had been charted for the process of normalizing U.S.-Cuba relations. What had been a process driven in large part from the Executive wing of the U.S. government and underscored by a host of executive orders meant to “make facts,” within which normalization might proceed on the basis of bilateral negotiations, has been swept aside. The President-elect has expressed his intention to renegotiate—and possibly to cancel—“the deal.” On November 28, 2016 Mr. Trump tweeted: “If Cuba is unwilling to make a better deal for the Cuban people, the Cuban/American people and the U.S. as a whole, I will terminate deal.” Complicating things further is the passing of Fidel Castro this week.

While already anticipated, the symbolic effect of his physical disappearance ought not to be underestimated. The death of Fidel is symbolically potent. It supplies the event that may put in play contingencies and plans for a “Post-Castro” Cuba both within the United States and within the sometimes byzantine military-party apparatus in Cuba. However, though as Fidel had long passed from the scene a driver of policy, his influence on the governing ideology of the state is still strong.

United States policy is now grounded in the assumption that (1) Raúl is different (and that is certainly true enough); and (2) that Raul can make manifest those differences in policy (which is less likely given the results of the 7th Cuban Communist Party Congress last April). Cuban policy is grounded in the assumption that it will not change its political or economic system, but that it will accommodate neighbors to the extent that they further internal objectives. The two policy trajectories have little common ground on which to meet.

If these germinal events—an election and a death—form the basis for the development of U.S.-Cuba policy going forward, what might be in store in the near term—in the next year or so—for Cuba’s economy, government and society? In the following, I will consider the twin effects of the election of Mr. Trump, a pro-embargo hardliner, on the U.S. side; and of Fidel Castro’s death and Raul Castro’s promise to step down in 2018, on the other.

With Respect to Economic Development

Initially there will be little change in the Cuban side. The Cuban Communist Party is in the midst of finalizing its blueprint for its economic ideology and reform, set out in the long and complex manifesto: “Conceptualización del modelo económico y social Cubano de desarrollo socialista” (for a discussion, see here).That “Conceptualization” pushes forward the central ideological framework of Fidelismo: markets, and market-driven economic policy, are rejected in favor of state-based central planning; state-to-state economic relations are preferred; and the object of economic policy is to mold the ideal socialist worker operating within a well-run socialist society whose needs are satisfied through socialist central planning. In this sense, Fidel continues to be quite influential.

What is worth watching is the willingness of the U.S. and Cuba to continue to talk about opening support services such as communications, transportation, and banking.

But Raúl is more pragmatic than his ideologically obsessed brother. That pragmatism provides a common ground—albeit limited—for shared policy objectives between the U.S. and Cuba. The course that Raúl Castro has plotted—a slow, steady progress that is institutionally managed—will continue. U.S. companies will find it no more or less difficult to do business in Cuban side of the equation. But that itself, at the moment does not auger well for US companies that are looking for more freewheeling investment. Thus, on the Cuban side of the equation expect to see forward movement in very specific forms: foreign investment funneled through special economic zones; targeted foreign investment within systems of principles-based rules that serve as a basis for the exercise of discretion by Cuban officials; the use of discretionary decision-making to keep foreign investment at arm’s length; and the Cuban state inserting itself between foreign capital and its population, will continue to be the rule. What is worth watching is the willingness of the U.S. and Cuba to continue to talk about opening support services such as communications, transportation, and banking.

The private sector will become more relevant, certainly, but big money transactions will involve the state as customer or business partner. The state also will continue to serve as the supplier of labor in Cuba. U.S. companies can expect to deal not just with the state sector, but with the multi-level discretionary administrative decision making structures. Perhaps a greater tolerance will be permitted the Cuban-American community as a resource for the private sector and its lower-end service sector work. With respect to U.S. regime change and democracy enhancing efforts, it is likely that the Cuban state will not be receptive.

Mr. Trump’s policies towards Cuba might be the overriding factor, rendering the passing of Castro irrelevant. One can already see the effect of Mr. Trump’s election—no high-ranking U.S. official will attend Mr. Castro’s funeral (that is to be regretted if only because funerals, like weddings, provide an opportunity for high level meetings to move agendas forward). More important, none of Mr. Trump’s government-in-waiting is likely to attend. That is the greater lapse, the consequences of which will become apparent during 2017. Mr. Trump appears to be surrounding himself with Cuban exile hardliners, and thus there will be some roll back of Obama’s normalization gestures, though which ones is unclear. Like his Republican predecessors, though, Mr. Trump may seek ways of ensuring that U.S. business interests are to some extent protected from his ideological campaigns. The principal effect might be to make the Cubans less willing to re-negotiate, especially if they can get the backing of another state that would like to block U.S. interests.

Fidel’s death will put a spotlight on the most important parts of the puzzle pieces that will determine the shape of U.S.-Cuba relations. Critical among these are the confidence of the Communist Party apparatus in their control of the state, and the Cubans’ reading of the intentions of the incoming U.S. administration. But also important is the actual development of a U.S. policy. The current two-track negotiations—the public and private ones—are likely to be the first victim; whether they are started up again in January remains to be seen. There is no doubt that Mr. Trump will likely amplify the ideological parts of U.S. engagement with Cuba; the real question is whether the U.S. and Cuba can continue doing business beneath the ramped-up rhetoric on both sides that is likely to come after January. More importantly, on the U.S. side, will be the choice for Secretary of State (the current choices all seem to be members of the old Republican ruling group) and the effect of defense (Defense Intelligence Agency etc.) and commerce considerations.

What to Expect Next

(1) In the U.S., the Trump government needs to defer, at least symbolically, to exile hardliners in order to pay back his political debt. In the past, these actions have been used buy both Cuban and U.S. governments to kill forward movement in diplomatic normalization, and when the symbolic act becomes concrete—especially when the act is ruthless (such as the downing of the Brothers to the Rescue plane)—the result can be a return to pre-normalization politics. That is the danger of the gamesmanship that may be anticipated for the next several months.

(2) Miscommunication between the U.S. and Cuba will be the norm, increasing the likelihood of error and disaster. Mr. Trump’s negotiating style is quite different from the standards of international diplomacy. In some ways, it is similar to those of old European Marxist regimes. But that art of negotiation through bluster and aggressive provocation is virtually unknown now. The Cubans,and especially Fidel, were once good at this as well. The clash of styles may lead to unintended consequences which are difficult to predict but unlikely to be in the long-term interests of either state.

(3) Expect the “wet foot, dry foot policy” to be a sacrificial offering on the alter of migration control. From an American perspective, this would indulge politics and produce a negotiating blunder of large proportion. It is in Cuba’s interest to end “wet foot, dry foot.” If Mr. Trump meant what he said about renegotiating, then he might use the termination of this policy as a bargaining chip. However, ending “wet foot, dry foot” would require the amendment of the Cuban Adjustment Act, something Mr. Trump may not do unilaterally without the formal or tacit acquiescence of Congress.

Mr. Trump may choose to follow the approach favored by certain hard right elements within the Cuban-American community and push first for the traditional menu of direct U.S. style political reform.

(4) Expect progress on economic agreements. Cuba has selected tourism as a favored economic objective. The U.S. sees in Cuba both additional markets (for agricultural products and tourism-related commerce). It is unlikely that Mr. Trump will annoy his supporters by threatening these objectives.

The legacy of Obama might not be completely undone. But it will be redirected, and the pace of change may slow. Fidel’s death makes things easier—he has moved from contemporary to historical presence. But Cuba and the U.S. still speak quite different political languages, and their objectives for Cuba are quite different: well-managed economic contributions for the Cubans, and political transition for the United States. There is a small space where their interests converge. But there are still many people fighting old ghosts on both sides of the Florida Straits, and it is possible that even this small space may be appropriated by those with a substantial interest in preserving the past.

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All essays are (c) Larry Catá Backer except where otherwise noted. All rights reserved. The essays may be cited and quoted with appropriate reference. Suggested reference as follows: Larry Catá Backer, [Essay Title], Law at the End of the Day, ([Essay Posting Date]) available at [http address].

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Globalization: Law and Policy will include an integrated bodyof scholarship that critically addresses key issues and theoretical debates in comparative and transnational law. Volumes in the series will focus on the consequential effects of globalization, including emerging frameworks and processes for the internationalization, legal harmonization, juridification and democratization of law among increasingly connected political, economic, religious, cultural, ethnic and other functionally differentiated governance communities. This series is intended as a resource for scholars, students, policy makers and civil society actors, and will include a balance of theoretical and policy studies in single-authored volumes and collections of original essays.

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About Me

I hope you enjoy these essays. Each treats aspects of the relationship between law, broadly understood, and human organization. My essays are about government and governance, based on the following assumptions: Humans organize themselves in all sorts of ways. We bind ourselves to organization by all sorts of instruments. Law has been deployed to elaborate differences between economic organizations (principally corporations, partnerships and other entities), political organization (the state, supra-national, international, and non-governmental organizations), religious, ethnic and family organization. I am not convinced that these separations, now sometimes blindly embraced, are particularly useful. This skepticism serves as the foundation of the essays here. My thanks to Arianna Backer for research assistance.